A federal judge in Florida ordered Brian Early and Alisha Ann Kingrey to pay more than $31 mn in restitution and civil penalties for their roles in a cryptocurrency and precious metals fraud involving Fundsz, according to the U.S. Commodity Futures Trading Commission.
The U.S. District Court for the Middle District of Florida entered default judgments against Early and Kingrey, who were defendants in a CFTC lawsuit filed in 2023.
The case involved Fundsz, an unincorporated trading operation that the regulator accused of defrauding more than 9,000 people through promises of guaranteed investment returns.
The court ordered Early and Kingrey to pay $15.73 mn in restitution and another $15.75 mn in civil monetary penalties. They were also permanently barred from trading and registering with the CFTC and prohibited from further violations of the Commodity Exchange Act and related regulations.
According to the CFTC, Early and Kingrey served as Fundsz board members and social media moderators. The court found they made false or misleading statements about expected profits, investment risks and Fundsz’s historical trading performance.
Fundsz told participants their money would be traded through a proprietary algorithm and available for withdrawal after 180 days with interest. The CFTC alleged the company didn’t trade customer funds as represented and instead reported fictional weekly returns.
Early and Kingrey promoted Fundsz through Telegram chats with customers, according to the regulator. The court found they misrepresented historical weekly profits and played down the risk of losses. After learning about the CFTC investigation, they began retreating from earlier profitability claims and worked to remove Fundsz’s social media presence, the court found.
Early didn’t immediately respond to a request for comment. Kingrey denied defrauding investors and said she had never met Fundsz founder Rene Larralde in person. She also said customers continued receiving payments until authorities froze the company’s assets and said she didn’t have the financial resources to pay the court sanctions.
The orders against Early and Kingrey followed separate consent orders involving Larralde’s estate and Juan Pablo Valcarce. The court found that Larralde, Fundsz’s founder and controlling person, and Valcarce deceived participants into investing in the operation.
It also found Larralde had diverted investor funds for personal use.
Larralde died in 2023. His estate representative agreed to relinquish ownership rights to a residence purchased with investor funds and more than $2.7 mn in other assets to the court-appointed receiver. About $4mn is expected to be returned to investors through the receivership.
Valcarce was permanently barred from further violations cited in the case and received permanent registration and trading bans. The default judgment and consent orders resolve the remaining claims in the CFTC’s Fundsz enforcement action.
